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Bernanke said QE3 could still come Getty Images via @daylife

In his post-FOMC press conference, Fed Chairman Ben Bernanke recognized his zero-interest rate policy hurts savers. Bernanke made it crystal clear that his intention is to make people spend, practically telling savers to get out there and invest. The Chairman also said QE3 is still on the table, while he disregarded Republican criticism of the Fed as “political rhetoric.”

After unveiling, for the first time, FOMC members’ predictions for when to begin to hike rates and tighten policy, Bernanke took to the microphone to respond to some specific questions regarding the Fed’s latest policy initiatives.

One of the toughest questions had to do with recent Republican hostility toward the Fed and its chairman, and if, in event Mitt Romney, Newt Gingrich, or any other GOP candidate won the election, if he would step down as Fed Chairman. Bernanke immediately dismissed the question, saying “I have a job to do” and adding he wouldn’t get “involved in political rhetoric” or “comment on a hypothetical situation.”

The Chairman was put on the spot with several questions regarding the effectiveness of his policies. Asked about the destruction of savings given ultra-low interest rates, Bernanke admitted he understood savers were getting a real bad deal. Essentially, Bernanke said the anemic recovery necessitated low interest rates to strengthen. Low rates are used to stimulate investment, according to Bernanke, and that “has a cost on savers.”

In other words, Bernanke told people to stop saving and start investing. When the economy is really bad, he explained, returns are going to be low and savers will get meager returns. Keeping your money in supposedly safe Treasury bills and CDs won’t help reactivate the economy, according to the Chairman’s view of the economy, and neither will keeping dollars under a mattress.

What the Chairman forgot to take into account is that flattening the yield curve has had adverse effects. The economy remains depressed and unemployment high, as he admitted, and consumption hasn’t picked up substantially. Big banks like JPMorgan Chase, Citi, and Wells Fargo are having a hard time lending, as they can’t profit from a sloping yield curve, and non-productive assets like gold and silver have surged. The second round of QE also saw capital fleeing the U.S. in search of yield, channeling into commodities and emerging market equities.

Asked specifically if the Fed should be doing more right now, Bernanke defended his tenure as Chairman saying they’d been quite active. Two rounds of quantitative easing, Operation Twist, a super massive balance sheet, and more transparent decision-making mechanisms (like the latest projections) are among the policies he mentioned. Bernanke did accept they haven’t hit their targets over the last couple of years and, even though inflation is under control, the unemployment rate remains too high.

Every option is on the table, is practically what Bernanke told reporters. To be fair, the Fed has been extremely active, and Bernanke has been masterful at managing market expectations. Inflation, which is directly connected to monetary policy, hasn’t spiked as many had feared (given the massive expansion of the Fed’s balance sheet), but unemployment is still a big problem.

It remains to be seen whether Bernanke will get a helping hand from Congress and the political establishment.